Pennar Investor Services Private Limited (B)

Abstract

Pennar Investor Services Private Limited (PISPL); a share registry company, was set up in 1994 by the Pennar Group of companies initially to service Pennar shareholders and then to take on similar work for other companies. The client companies were doing very well and the fees for maintaing the shares and registering transfer of ownership guaranteed a regular and growing income for PISPL. Within two years, however, the client companies started failing largely because of stiff competition. Their share prices plunged so low that there was hardly any trade in their shares. PISPL, which depended exclusively on the Pennar Group, was hit hard. Wg Cdr AB Bhusan, President of PISPL, reduced the number of his employees from seventeen to three by the end of 2001. They all resigned at the time they chose; none of them insisted on or went to court for any compensation.